Exhibit 99.1
Shore Bancshares, Inc.
18 E. Dover Street
Easton, Maryland 21601
Phone 410-822-1400
PRESS RELEASE
Shore Bancshares Reports Third Quarter and Nine-Month Results
Easton, Maryland (10/24/2008) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported net income of $3.1 million or $0.37 per diluted share for the third quarter of 2008, compared to $2.8 million or $0.33 per diluted share for the second quarter of 2008 and $3.4 million or $0.40 per diluted share for the third quarter of 2007. Net income for the first nine months of 2008 was $9.2 million or $1.10 per diluted share, compared to $10.1 million or $1.20 per diluted share for the first nine months of 2007.
“Overall, even though the banking climate did not improve, we are pleased with our third quarter results as net income increased 11% over the second quarter. Returns on average assets and equity also were higher than they were at the end of the second quarter of 2008,” said W. Moorhead Vermilye, president and chief executive officer. “Over the first nine months of this year, loans grew 11.5% and this growth was funded mainly by deposit growth (+9.6%), which is encouraging in such a competitive and rate-sensitive banking environment. The net interest margin did decline by 7 basis points to 4.10%, when compared to the second quarter of this year.”
“Our profitability and the strength of our balance sheet have enabled us to further build our solid capital position, which grew by 4.3% over the first nine months of 2008 to $125.4 million and results in a ratio of average equity to average assets of 12.33%.”
“We increased the provision for credit losses during the third quarter to $875 thousand bringing the total allowance for possible credit losses to 1% of total loans at quarter-end, which is up from 0.98% at June 30, 2008 and 0.96% a year ago. The ratio of annualized net charge-offs to average loans advanced to 0.25% and the ratio of nonperforming assets to total assets increased to 0.72% at quarter-end. We believe that our current loan-loss reserves are adequate and that our levels of charge-offs and nonperforming assets will compare favorably to our peers when third quarter results are in for the other Mid-Atlantic banking companies.”
“Credit quality in the existing loan portfolios is paramount -- we are working proactively to identify potential problems, establish rational values and build reserves accordingly, as evidenced by the increase in this quarter’s provision. Credit quality will also be an acute focus as we originate new loans. We recognize that continuing to grow our capital base is essential to our ability to expand organically and our ability to evaluate acquisition-related opportunities,” said Vermilye.
The Company’s return on average assets for the third quarter of 2008 was 1.19%, compared to 1.12% and 1.42% for the quarters ended June 30, 2008 and September 30, 2007, respectively. The return on average stockholders’ equity was 9.81% for the third quarter of 2008, compared to 8.98% for the second quarter of 2008 and 11.51% for the third quarter of 2007.
The Company’s return on average assets for the first nine months of 2008 was 1.23%, compared to 1.43% for the first nine months of 2007. The return on average stockholders’ equity was 9.95% for the first nine months of 2008, compared to 11.76% for the same period in 2007.
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At September 30, 2008, total assets were $1.037 billion, total deposits were $839.2 million, and total stockholders’ equity was $125.4 million, an increase of 8.4%, 9.6% and 4.3%, respectively, when compared to the same amounts at December 31, 2007. The increase in total assets of $80.1 million since December 31, 2007 related mainly to loan growth, funded primarily by deposit growth. The growth in loans was $89.1 million, or 11.5%, during the first nine months of 2008, with period-end loans totaling $865.4 million at September 30, 2008.
Review of Quarterly Financial Results
Net interest income for the third quarter of 2008 was $9.9 million, an increase of 2.9% from the second quarter of 2008 and a decrease of 5.3% from the same period last year. Higher loan volume was the primary reason for the increase from the second quarter of 2008 and lower yields on earning assets was the primary reason for the decrease from the third quarter of 2007. The Company’s net interest margin was 4.10% for the third quarter of 2008, a decrease of 7 basis points when compared to the second quarter of 2008 and a decrease of 64 basis points when compared to the third quarter of 2007.
The provision for credit losses was $875 thousand for the three months ended September 30, 2008. The comparable amounts were $615 thousand and $604 thousand for the three months ended June 30, 2008 and September 30, 2007, respectively. The increased provision for the third quarter of 2008 when compared to the second quarter of 2008 and the third quarter of 2007 reflected the continued growth in the loan portfolio, an increase in nonperforming assets and charge-offs, as well as overall economic conditions. Net charge-offs were $539 thousand for the third quarter of 2008, $259 thousand for the second quarter of 2008 and $268 thousand for the third quarter of 2007. Quarter-to-date annualized net charge-offs to average loans was 0.25% for the third quarter of 2008, 0.13% for the second quarter of 2008 and 0.15% for the third quarter of 2007. Nonperforming assets to total assets was 0.72% at September 30, 2008. The comparable nonperforming asset ratio was 0.47% at both June 30, 2008 and September 30, 2007. The allowance for credit losses to period-end loans was 1.00% at September 30, 2008, 0.98% at June 30, 2008 and 0.96% at September 30, 2007. Management believes that the provision for credit losses and the resulting allowance were adequate at September 30, 2008.
Total noninterest income for the third quarter of 2008 increased $2.2 million when compared to the third quarter of 2007. Service charge income decreased $26 thousand, insurance agency commissions increased $1.4 million and other noninterest income increased $775 thousand for the third quarter of 2008 when compared to the third quarter of 2007. The increase in insurance agency commissions was primarily the result of the acquisition of two insurance agencies during the fourth quarter of 2007. Included in other noninterest income was a $1.3 million gain on the sale of a bank branch to the State of Maryland as part of a road widening project. This gain was partially offset by a $371 thousand write-down of Freddie Mac Preferred Stock and a $337 thousand loss on the sale of the Company’s investment in Delmarva Bank Data Processing Center, Inc., an unconsolidated subsidiary. Total noninterest income increased $52 thousand from the second quarter of 2008 primarily due to an increase in other noninterest income of $420 thousand, which included the $1.3 million gain on the land and bank building sale and the $708 thousand investment write-down and loss, partially offset by a decrease in insurance agency commissions of $374 thousand.
Noninterest expense for the third quarter of 2008 increased $1.8 million when compared to the third quarter of 2007. The increase was primarily attributable to the operating expenses of the two insurance agencies acquired during the fourth quarter of 2007. Salaries and benefits increased $979 thousand and other noninterest expenses increased $662 thousand for the third quarter of 2008 when compared to the third quarter of 2007. Noninterest expense decreased $300 thousand from the second quarter of 2008 primarily due to a decrease in other noninterest expenses, including lower professional fees of $124 thousand and lower insurance commission expense of $170 thousand.
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Review of Nine-Month Financial Results
Net interest income for the first nine months of 2008 was $29.6 million, a decrease of 3.4% when compared to the first nine months of 2007. The decrease was primarily the result of lower yields on earning assets. The net interest margin declined 40 basis points from 4.62% for the first nine months of 2007 to 4.22% for the first nine months of 2008.
The provisions for credit losses for the nine months ended September 30, 2008 and 2007 were $2.0 million and $1.3 million, respectively. The increased provision in 2008 reflected the overall growth of the loan portfolio, an increase in nonperforming loans and charge-offs, and overall economic conditions. Net charge-offs were $885 thousand and $338 thousand for the nine months ended September 30, 2008 and 2007, respectively. Year-to-date annualized net charge-offs to average loans was 0.14% for the first nine months of 2008 and 0.06% for the same period in 2007.
Total noninterest income for the nine months ended September 30, 2008 totaled $15.9 million, an increase of $6.0 million when compared to the same period in 2007. Service charge income increased $291 thousand, insurance agency commissions increased $4.6 million and other noninterest income increased $1.1 million for the first nine months of 2008 when compared to the same period last year. The increase in insurance agency commissions was primarily due to the acquisition of the two insurance agencies during the fourth quarter of 2007. Other noninterest income included the previously mentioned $1.3 million gain on the land and bank building sale and the $708 thousand investment write-down and loss.
Noninterest expense for the nine months ended September 30, 2008 was $28.7 million, an increase of $5.5 million when compared to the same period in 2007. The increase was primarily attributable to the operating expenses of the two insurance agencies acquired during the fourth quarter of 2007. Salaries and benefits increased $3.1 million and other noninterest expenses increased $2.2 million for the first nine months of 2008 when compared to the same period in 2007.
Shore Bancshares Information
Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland’s Eastern Shore. It is the parent company of three banks, The Talbot Bank of Easton, Maryland, The Centreville National Bank of Maryland, and The Felton Bank; three insurance producer firms, The Avon-Dixon Agency, LLC, Elliott Wilson Insurance, LLC and Jack Martin and Associates, Inc; a wholesale insurance company, TSGIA, Inc; two insurance premium finance companies, Mubell Finance, LLC and ESFS, Inc; a registered investment adviser firm, Wye Financial Services, LLC; and a mortgage broker subsidiary, Wye Mortgage Group, LLC.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements about management’s beliefs, plans and objectives. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.
For further information contact: W. Moorhead Vermilye, President and CEO
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Shore Bancshares, Inc. | |||||||||||||||||||
Financial Highlights | |||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||
PROFITABILITY FOR THE PERIOD | |||||||||||||||||||
Net interest income | $ | 9,909 | $ | 10,463 | (5.3 | )% | $ | 29,571 | $ | 30,610 | (3.4 | )% | |||||||
Provision for credit losses | 875 | 604 | 44.9 | 1,952 | 1,259 | 55.0 | |||||||||||||
Noninterest income | 5,246 | 3,055 | 71.7 | 15,942 | 9,964 | 60.0 | |||||||||||||
Noninterest expense | 9,429 | 7,599 | 24.1 | 28,749 | 23,237 | 23.7 | |||||||||||||
Income before income taxes | 4,851 | 5,315 | (8.7 | ) | 14,812 | 16,078 | (7.9 | ) | |||||||||||
Income tax expense | 1,780 | 1,964 | (9.4 | ) | 5,603 | 5,968 | (6.1 | ) | |||||||||||
Net income | $ | 3,071 | $ | 3,351 | (8.4 | ) | $ | 9,209 | $ | 10,110 | (8.9 | ) | |||||||
Return on average assets | 1.19 | % | 1.42 | % | (16.2 | )% | 1.23 | % | 1.43 | % | (14.0 | )% | |||||||
Return on average equity | 9.81 | 11.51 | (14.8 | ) | 9.95 | 11.76 | (15.4 | ) | |||||||||||
Net interest margin | 4.10 | 4.74 | (13.5 | ) | 4.22 | 4.62 | (8.7 | ) | |||||||||||
Efficiency ratio - GAAP based | 62.22 | 56.21 | 10.7 | 63.17 | 57.27 | 10.3 | |||||||||||||
PER SHARE DATA | |||||||||||||||||||
Basic net income | $ | 0.37 | $ | 0.40 | (7.5 | )% | $ | 1.10 | $ | 1.21 | (9.1 | )% | |||||||
Diluted net income | 0.37 | 0.40 | (7.5 | ) | 1.10 | 1.20 | (8.3 | ) | |||||||||||
Dividends paid | 0.16 | 0.16 | - | 0.48 | 0.48 | - | |||||||||||||
Book value at period end | 14.92 | 14.05 | 6.2 | ||||||||||||||||
Tangible book value at period end | 12.30 | 12.46 | (1.3 | ) | |||||||||||||||
Market value at period end | 25.70 | 24.14 | 6.5 | ||||||||||||||||
Market range: | |||||||||||||||||||
High | 27.25 | 27.05 | 0.7 | 27.25 | 30.76 | (11.4 | ) | ||||||||||||
Low | 18.00 | 20.52 | (12.3 | ) | 18.00 | 20.52 | (12.3 | ) | |||||||||||
AT PERIOD END | |||||||||||||||||||
Loans | $ | 865,437 | $ | 750,457 | 15.3 | % | |||||||||||||
Securities | 93,149 | 122,773 | (24.1 | ) | |||||||||||||||
Assets | 1,037,026 | 939,877 | 10.3 | ||||||||||||||||
Deposits | 839,217 | 760,123 | 10.4 | ||||||||||||||||
Stockholders' equity | 125,401 | 117,736 | 6.5 | ||||||||||||||||
CAPITAL AND CREDIT QUALITY RATIOS | |||||||||||||||||||
Average equity to average assets | 12.12 | % | 12.30 | % | 12.33 | % | 12.13 | % | |||||||||||
Annualized net charge-offs to average loans | 0.25 | 0.15 | 0.14 | 0.06 | |||||||||||||||
Allowance for credit losses to period-end loans | 1.00 | 0.96 | |||||||||||||||||
Nonperforming assets to total assets | 0.72 | 0.47 |
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Shore Bancshares, Inc. | ||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Sep. 30, 2008 | Sep. 30, 2008 | |||||||||||||||
Sep. 30, | Dec. 31, | Sep. 30, | compared to | compared to | ||||||||||||
2008 | 2007 | 2007 | Dec. 31, 2007 | Sep. 30, 2007 | ||||||||||||
ASSETS | ||||||||||||||||
Cash and due from banks | $ | 21,883 | $ | 17,198 | $ | 19,972 | 27.2 | % | 9.6 | % | ||||||
Interest-bearing deposits with other banks | 513 | 3,036 | 3,642 | (83.1 | ) | (85.9 | ) | |||||||||
Federal funds sold | 15,416 | 6,646 | 7,039 | 132.0 | 119.0 | |||||||||||
Investments available-for-sale (at fair value) | 82,235 | 97,137 | 109,873 | (15.3 | ) | (25.2 | ) | |||||||||
Investments held-to-maturity | 10,914 | 12,896 | 12,900 | (15.4 | ) | (15.4 | ) | |||||||||
Loans | 865,437 | 776,350 | 750,457 | 11.5 | 15.3 | |||||||||||
Less: allowance for credit losses | (8,618 | ) | (7,551 | ) | (7,221 | ) | 14.1 | 19.3 | ||||||||
Loans, net | 856,819 | 768,799 | 743,236 | 11.4 | 15.3 | |||||||||||
Premises and equipment, net | 14,097 | 15,617 | 15,651 | (9.7 | ) | (9.9 | ) | |||||||||
Accrued interest receivable | 5,023 | 5,008 | 5,840 | 0.3 | (14.0 | ) | ||||||||||
Goodwill | 15,954 | 15,954 | 11,939 | - | 33.6 | |||||||||||
Other intangible assets, net | 6,050 | 6,436 | 1,366 | (6.0 | ) | 342.9 | ||||||||||
Other real estate owned | - | 176 | 745 | (100.0 | ) | (100.0 | ) | |||||||||
Other assets | 8,122 | 8,008 | 7,674 | 1.4 | 5.8 | |||||||||||
Total assets | $ | 1,037,026 | $ | 956,911 | $ | 939,877 | 8.4 | 10.3 | ||||||||
LIABILITIES | ||||||||||||||||
Noninterest-bearing deposits | $ | 118,049 | $ | 104,081 | $ | 110,496 | 13.4 | 6.8 | ||||||||
Interest-bearing deposits | 721,168 | 661,814 | 649,627 | 9.0 | 11.0 | |||||||||||
Total deposits | 839,217 | 765,895 | 760,123 | 9.6 | 10.4 | |||||||||||
Short-term borrowings | 53,078 | 47,694 | 39,389 | 11.3 | 34.8 | |||||||||||
Long-term debt | 8,485 | 12,485 | 16,000 | (32.0 | ) | (47.0 | ) | |||||||||
Accrued interest payable and other liabilities | 10,845 | 10,602 | 6,629 | 2.3 | 63.6 | |||||||||||
Total liabilities | 911,625 | 836,676 | 822,141 | 9.0 | 10.9 | |||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||
Common stock, par value $0.01; authorized | ||||||||||||||||
35,000,000 shares | 84 | 84 | 84 | - | - | |||||||||||
Additional paid in capital | 29,744 | 29,539 | 29,518 | 0.7 | 0.8 | |||||||||||
Retained earnings | 95,224 | 90,365 | 88,367 | 5.4 | 7.8 | |||||||||||
Accumulated other comprehensive income (loss) | 349 | 247 | (233 | ) | 41.3 | 249.8 | ||||||||||
Total stockholders' equity | 125,401 | 120,235 | 117,736 | 4.3 | 6.5 | |||||||||||
Total liabilities and stockholders' equity | $ | 1,037,026 | $ | 956,911 | $ | 939,877 | 8.4 | 10.3 | ||||||||
Period-end shares outstanding | 8,405 | 8,381 | 8,380 | 0.3 | 0.3 | |||||||||||
Book value per share | $ | 14.92 | $ | 14.35 | $ | 14.05 | 4.0 | 6.2 |
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Shore Bancshares, Inc. | |||||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||
INTEREST INCOME | |||||||||||||||||||
Interest and fees on loans | $ | 14,179 | $ | 14,732 | (3.8 | )% | $ | 42,700 | $ | 42,566 | 0.3 | % | |||||||
Interest and dividends on investment securities: | |||||||||||||||||||
Taxable | 924 | 1,325 | (30.3 | ) | 2,949 | 3,900 | (24.4 | ) | |||||||||||
Tax-exempt | 95 | 128 | (25.8 | ) | 327 | 387 | (15.5 | ) | |||||||||||
Interest on federal funds sold | 79 | 178 | (55.6 | ) | 284 | 988 | (71.3 | ) | |||||||||||
Interest on deposits with other banks | 21 | 180 | (88.3 | ) | 88 | 847 | (89.6 | ) | |||||||||||
Total interest income | 15,298 | 16,543 | (7.5 | ) | 46,348 | 48,688 | (4.8 | ) | |||||||||||
INTEREST EXPENSE | |||||||||||||||||||
Interest on deposits | 4,955 | 5,493 | (9.8 | ) | 15,295 | 16,263 | (6.0 | ) | |||||||||||
Interest on short-term borrowings | 344 | 279 | 23.3 | 1,026 | 838 | 22.4 | |||||||||||||
Interest on long-term debt | 90 | 308 | (70.8 | ) | 456 | 977 | (53.3 | ) | |||||||||||
Total interest expense | 5,389 | 6,080 | (11.4 | ) | 16,777 | 18,078 | (7.2 | ) | |||||||||||
NET INTEREST INCOME | 9,909 | 10,463 | (5.3 | ) | 29,571 | 30,610 | (3.4 | ) | |||||||||||
Provision for credit losses | 875 | 604 | 44.9 | 1,952 | 1,259 | 55.0 | |||||||||||||
NET INTEREST INCOME AFTER PROVISION | |||||||||||||||||||
FOR CREDIT LOSSES | 9,034 | 9,859 | (8.4 | ) | 27,619 | 29,351 | (5.9 | ) | |||||||||||
NONINTEREST INCOME | |||||||||||||||||||
Service charges on deposit accounts | 923 | 949 | (2.7 | ) | 2,711 | 2,420 | 12.0 | ||||||||||||
Investment securities gains (losses) | - | - | - | - | 1 | (100.0 | ) | ||||||||||||
Insurance agency commissions | 2,845 | 1,403 | 102.8 | 9,595 | 5,004 | 91.7 | |||||||||||||
Other noninterest income | 1,478 | 703 | 110.2 | 3,636 | 2,539 | 43.2 | |||||||||||||
Total noninterest income | 5,246 | 3,055 | 71.7 | 15,942 | 9,964 | 60.0 | |||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||||
Salaries and employee benefits | 5,802 | 4,823 | 20.3 | 17,545 | 14,471 | 21.2 | |||||||||||||
Occupancy expense | 558 | 460 | 21.3 | 1,594 | 1,444 | 10.4 | |||||||||||||
Furniture and equipment expense | 310 | 318 | (2.5 | ) | 894 | 988 | (9.5 | ) | |||||||||||
Data processing | 486 | 454 | 7.0 | 1,396 | 1,353 | 3.2 | |||||||||||||
Directors' fees | 131 | 136 | (3.7 | ) | 426 | 427 | (0.2 | ) | |||||||||||
Amortization of intangible assets | 128 | 56 | 128.6 | 386 | 203 | 90.1 | |||||||||||||
Other noninterest expenses | 2,014 | 1,352 | 49.0 | 6,508 | 4,351 | 49.6 | |||||||||||||
Total noninterest expense | 9,429 | 7,599 | 24.1 | 28,749 | 23,237 | 23.7 | |||||||||||||
Income before income taxes | 4,851 | 5,315 | (8.7 | ) | 14,812 | 16,078 | (7.9 | ) | |||||||||||
Income tax expense | 1,780 | 1,964 | (9.4 | ) | 5,603 | 5,968 | (6.1 | ) | |||||||||||
NET INCOME | $ | 3,071 | $ | 3,351 | (8.4 | ) | $ | 9,209 | $ | 10,110 | (8.9 | ) | |||||||
Weighted average shares outstanding - basic | 8,388 | 8,380 | 0.1 | 8,382 | 8,380 | 0.0 | |||||||||||||
Weighted average shares outstanding - diluted | 8,395 | 8,392 | 0.0 | 8,390 | 8,394 | (0.0 | ) | ||||||||||||
Basic net income per share | $ | 0.37 | $ | 0.40 | (7.5 | ) | $ | 1.10 | $ | 1.21 | (9.1 | ) | |||||||
Diluted net income per share | 0.37 | 0.40 | (7.5 | ) | 1.10 | 1.20 | (8.3 | ) | |||||||||||
Dividends paid per share | 0.16 | 0.16 | - | 0.48 | 0.48 | - |
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Shore Bancshares, Inc. | ||||||||||||||||||||||
Financial Highlights By Quarter | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
3rd quarter | 2nd quarter | 1st quarter | 4th quarter | 3rd quarter | 3Q 08 | 3Q 08 | ||||||||||||||||
2008 | 2008 | 2008 | 2007 | 2007 | compared to | compared to | ||||||||||||||||
(3Q 08) | (2Q 08) | (1Q 08) | (4Q 07) | (3Q 07) | 2Q 08 | 3Q 07 | ||||||||||||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||||||||||||
Net interest income | $ | 9,909 | $ | 9,632 | $ | 10,030 | $ | 10,426 | $ | 10,463 | 2.9 | % | (5.3 | )% | ||||||||
Provision for credit losses | 875 | 615 | 462 | 465 | 604 | 42.3 | 44.9 | |||||||||||||||
Noninterest income | 5,246 | 5,194 | 5,502 | 4,715 | 3,055 | 1.0 | 71.7 | |||||||||||||||
Noninterest expense | 9,429 | 9,729 | 9,591 | 9,302 | 7,599 | (3.1 | ) | 24.1 | ||||||||||||||
Income before income taxes | 4,851 | 4,482 | 5,479 | 5,374 | 5,315 | 8.2 | (8.7 | ) | ||||||||||||||
Income tax expense | 1,780 | 1,716 | 2,107 | 2,034 | 1,964 | 3.7 | (9.4 | ) | ||||||||||||||
Net income | $ | 3,071 | $ | 2,766 | $ | 3,372 | $ | 3,340 | $ | 3,351 | 11.0 | (8.4 | ) | |||||||||
Return on average assets | 1.19 | % | 1.12 | % | 1.38 | % | 1.40 | % | 1.42 | % | 6.2 | % | (16.2 | )% | ||||||||
Return on average equity | 9.81 | 8.98 | 10.96 | 11.78 | 11.51 | 9.2 | (14.8 | ) | ||||||||||||||
Net interest margin | 4.10 | 4.17 | 4.42 | 4.70 | 4.74 | (1.7 | ) | (13.5 | ) | |||||||||||||
Efficiency ratio - GAAP based | 62.22 | 65.62 | 61.75 | 61.44 | 56.21 | (5.2 | ) | 10.7 | ||||||||||||||
PER SHARE DATA | ||||||||||||||||||||||
Basic net income | $ | 0.37 | $ | 0.33 | $ | 0.40 | $ | 0.40 | $ | 0.40 | 12.1 | % | (7.5 | )% | ||||||||
Diluted net income | 0.37 | 0.33 | 0.40 | 0.40 | 0.40 | 12.1 | (7.5 | ) | ||||||||||||||
Dividends paid | 0.16 | 0.16 | 0.16 | 0.16 | 0.16 | - | - | |||||||||||||||
Book value at period end | 14.92 | 14.65 | 14.62 | 14.35 | 14.05 | 1.8 | 6.2 | |||||||||||||||
Tangible book value at period end | 12.30 | 12.01 | 11.96 | 11.68 | 12.46 | 2.4 | (1.3 | ) | ||||||||||||||
Market value at period end | 25.70 | 18.72 | 21.45 | 21.95 | 24.14 | 37.3 | 6.5 | |||||||||||||||
Market range: | ||||||||||||||||||||||
High | 27.25 | 26.47 | 23.40 | 24.72 | 27.05 | 2.9 | 0.7 | |||||||||||||||
Low | 18.00 | 18.52 | 20.00 | 20.00 | 20.52 | (2.8 | ) | (12.3 | ) | |||||||||||||
AT PERIOD END | ||||||||||||||||||||||
Loans | $ | 865,437 | $ | 841,600 | $ | 808,583 | $ | 776,350 | $ | 750,457 | 2.8 | % | 15.3 | % | ||||||||
Securities | 93,149 | 91,842 | 99,062 | 110,033 | 122,773 | 1.4 | (24.1 | ) | ||||||||||||||
Assets | 1,037,026 | 1,019,463 | 1,003,836 | 956,911 | 939,877 | 1.7 | 10.3 | |||||||||||||||
Deposits | 839,217 | 818,656 | 808,917 | 765,895 | 760,123 | 2.5 | 10.4 | |||||||||||||||
Stockholders' equity | 125,401 | 123,038 | 122,699 | 120,235 | 117,736 | 1.9 | 6.5 | |||||||||||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||||||||||||
Average equity to average assets | 12.12 | % | 12.41 | % | 12.56 | % | 11.91 | % | 12.30 | % | ||||||||||||
Annualized net charge-offs to average loans | 0.25 | 0.13 | 0.04 | 0.06 | 0.15 | |||||||||||||||||
Allowance for credit losses to period-end loans | 1.00 | 0.98 | 0.98 | 0.97 | 0.96 | |||||||||||||||||
Nonperforming assets to total assets | 0.72 | 0.47 | 0.34 | 0.39 | 0.47 |
Page 8 of 8
Shore Bancshares, Inc. | ||||||||||||||||||||||
Consolidated Statements of Income By Quarter | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
3Q 08 | 3Q 08 | |||||||||||||||||||||
compared to | compared to | |||||||||||||||||||||
3Q 08 | 2Q 08 | 1Q 08 | 4Q 07 | 3Q 07 | 2Q 08 | 3Q 07 | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||
Interest and fees on loans | $ | 14,179 | $ | 13,961 | $ | 14,560 | $ | 14,958 | $ | 14,732 | 1.6 | % | (3.8 | )% | ||||||||
Interest and dividends on investment securities: | ||||||||||||||||||||||
Taxable | 924 | 945 | 1,080 | 1,205 | 1,325 | (2.2 | ) | (30.3 | ) | |||||||||||||
Tax-exempt | 95 | 109 | 123 | 124 | 128 | (12.8 | ) | (25.8 | ) | |||||||||||||
Interest on federal funds sold | 79 | 83 | 122 | 120 | 178 | (4.8 | ) | (55.6 | ) | |||||||||||||
Interest on deposits with other banks | 21 | 29 | 38 | 46 | 180 | (27.6 | ) | (88.3 | ) | |||||||||||||
Total interest income | 15,298 | 15,127 | 15,923 | 16,453 | 16,543 | 1.1 | (7.5 | ) | ||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||
Interest on deposits | 4,955 | 4,997 | 5,343 | 5,430 | 5,493 | (0.8 | ) | (9.8 | ) | |||||||||||||
Interest on short-term borrowings | 344 | 316 | 366 | 426 | 279 | 8.9 | 23.3 | |||||||||||||||
Interest on long-term debt | 90 | 182 | 184 | 171 | 308 | (50.5 | ) | (70.8 | ) | |||||||||||||
Total interest expense | 5,389 | 5,495 | 5,893 | 6,027 | 6,080 | (1.9 | ) | (11.4 | ) | |||||||||||||
NET INTEREST INCOME | 9,909 | 9,632 | 10,030 | 10,426 | 10,463 | 2.9 | (5.3 | ) | ||||||||||||||
Provision for credit losses | 875 | 615 | 462 | 465 | 604 | 42.3 | 44.9 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||||||||||||||
FOR CREDIT LOSSES | 9,034 | 9,017 | 9,568 | 9,961 | 9,859 | 0.2 | (8.4 | ) | ||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||
Service charges on deposit accounts | 923 | 917 | 871 | 952 | 949 | 0.7 | (2.7 | ) | ||||||||||||||
Investment securities gains (losses) | - | - | - | 4 | - | - | - | |||||||||||||||
Insurance agency commissions | 2,845 | 3,219 | 3,531 | 2,694 | 1,403 | (11.6 | ) | 102.8 | ||||||||||||||
Other noninterest income | 1,478 | 1,058 | 1,100 | 1,065 | 703 | 39.7 | 110.2 | |||||||||||||||
Total noninterest income | 5,246 | 5,194 | 5,502 | 4,715 | 3,055 | 1.0 | 71.7 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||
Salaries and employee benefits | 5,802 | 5,759 | 5,984 | 5,520 | 4,823 | 0.7 | 20.3 | |||||||||||||||
Occupancy expense | 558 | 537 | 499 | 518 | 460 | 3.9 | 21.3 | |||||||||||||||
Furniture and equipment expense | 310 | 298 | 286 | 324 | 318 | 4.0 | (2.5 | ) | ||||||||||||||
Data processing | 486 | 440 | 470 | 467 | 454 | 10.5 | 7.0 | |||||||||||||||
Directors' fees | 131 | 130 | 165 | 178 | 136 | 0.8 | (3.7 | ) | ||||||||||||||
Amortization of intangible assets | 128 | 129 | 129 | 130 | 56 | (0.8 | ) | 128.6 | ||||||||||||||
Other noninterest expenses | 2,014 | 2,436 | 2,058 | 2,165 | 1,352 | (17.3 | ) | 49.0 | ||||||||||||||
Total noninterest expense | 9,429 | 9,729 | 9,591 | 9,302 | 7,599 | (3.1 | ) | 24.1 | ||||||||||||||
Income before income taxes | 4,851 | 4,482 | 5,479 | 5,374 | 5,315 | 8.2 | (8.7 | ) | ||||||||||||||
Income tax expense | 1,780 | 1,716 | 2,107 | 2,034 | 1,964 | 3.7 | (9.4 | ) | ||||||||||||||
NET INCOME | $ | 3,071 | $ | 2,766 | $ | 3,372 | $ | 3,340 | $ | 3,351 | 11.0 | (8.4 | ) | |||||||||
Weighted average shares outstanding - basic | 8,388 | 8,381 | 8,391 | 8,380 | 8,380 | 0.1 | 0.1 | |||||||||||||||
Weighted average shares outstanding - diluted | 8,395 | 8,388 | 8,400 | 8,391 | 8,392 | 0.1 | 0.0 | |||||||||||||||
Basic net income per share | $ | 0.37 | $ | 0.33 | $ | 0.40 | $ | 0.40 | $ | 0.40 | 12.1 | (7.5 | ) | |||||||||
Diluted net income per share | 0.37 | 0.33 | 0.40 | 0.40 | 0.40 | 12.1 | (7.5 | ) | ||||||||||||||
Dividends paid per share | 0.16 | 0.16 | 0.16 | 0.16 | 0.16 | - | - |